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Crafting Winning Pricing Strategies in the Tech World

Ann Velikaya, Copywriter at MadAppGang
Ann Velikaya

Pricing has the power to shape the destiny of your startup, especially in the tech world. With a decade of industry experience, MadAppGang is here to guide aspiring IT companies develop winning pricing strategies. Let's explore the most important strategies with examples from industry leaders.

1. Value-based pricing: Apple's tech elegance

Apple's value-based pricing prowess is remarkable. The company prices its products to align with the value they bring. As an IT startup, highlight your unique offerings and set prices that mirror the benefits customers gain.

2. Freemium model: Following Dropbox's lead

Dropbox pioneered the freemium model, offering a basic service for free and charging for premium features. Use this model to engage users with free options and encourage them to upgrade to advanced features.

3. Dynamic pricing: Uber's adaptive approach

Uber's dynamic pricing adapts to real-time supply and demand. Apply this dynamic concept to your IT solutions for industries with volatile demand to ensure optimised revenue during peak periods.

4. Psychological pricing: Amazon's strategic nines

Amazon's preference for prices ending in 9 creates a perception of affordability. As a tech startup, experiment with psychological pricing to make your solutions appear more budget-friendly.

5. Bundle pricing: The tech combo strategy

Mimic the bundle strategy of McDonald's by combining tech offerings into packages with cost savings. By offering bundled solutions, you encourage customers to explore multiple offerings, boosting your overall sales.

Lots of white numbers on a green background

6. Penetration pricing: Xiaomi's market entry

Xiaomi's aggressive pricing approach accelerated its market entry. Consider penetration pricing, offering a much lower price than your competitors, to quickly gain market share and customer loyalty before gradually increasing prices.

7. Pay-what-you-want model: Inspired by Radiohead

Copy Radiohead's experiment and let your customers decide how much they want to pay for your IT solutions. This approach encourages customer loyalty and engagement, resulting in a loyal user base.

8. Subscription pricing: Embracing the Netflix model

Netflix revolutionised entertainment with its subscription model. Adapt this model to your IT services for a steady revenue stream and offer multiple subscription plans to meet different customer needs.

9. Tiered pricing: Scaling like Salesforce

Salesforce's tiered pricing approach accommodates different user needs. Create multiple pricing tiers for your IT solutions to attract a wide range of customers.

10. Competitive pricing: Coca-Cola vs. Pepsi style

Coca-Cola and Pepsi maintain competitive pricing to ensure market share. Keep an eye on your IT competitors' strategies and balance competitiveness with your unique value proposition.

Of course, not all of these approaches are applicable to the IT industry, but they can help inspire new pricing strategies.

Mistakes to avoid when pricing your IT solutions

While understanding effective pricing strategies is crucial, it’s equally important to avoid common pitfalls. Here are three pricing mistakes we recommend new IT companies avoid:

1. Pricing blindly without data

A drawn, blindfolded man walks towards a cliff with bills flying over it, looking for a better pricing strategy

One of the gravest mistakes startups can make is setting prices without thorough data analysis. Relying solely on gut feelings or mimicking competitors can lead to pricing that doesn't align with the value you offer. 

Conduct comprehensive market research, understand your target audience's willingness to pay, and gather insights on your costs. Data-driven decisions will lay a solid foundation for a successful pricing strategy.

2. Ignoring scalability and flexibility

Two road signs with the words "scalability" and "flexability" and arrows up on them

As your IT startup evolves, so should your pricing. Ignoring scalability and flexibility in your pricing models can hinder growth. 

Avoid rigid structures that can't adapt to changing customer needs, new features, or market shifts. Ensure that your pricing strategy has room for adjustment and innovation so that you can quickly adapt to changing circumstances.

Pricing is a dynamic and strategic endeavour that requires careful consideration. By adopting effective pricing strategies and avoiding common mistakes, your emerging IT business has the foundation it needs for sustainable success in the competitive technology landscape.

3. Underestimating the power of perceived value

A cartoon figure with arms outstretched stands in the center of a balancing platform, on one end of which is written "competitive pricing" and on the other "reflecting the value of your solutions"

Excessively discounting your IT solutions may seem like a quick way to attract customers, but it can backfire if it compromises perceived value. Undervaluing your offerings can lead potential customers to question their quality or effectiveness. 

Strike a balance between competitive pricing and reflecting the value of your solutions. Emphasise the benefits and unique features of your products to justify price points and build trust with your target audience.


As you embark on your journey to build innovative startups, remember that pricing isn't just a number — it's a strategic tool that can shape your brand and influence your success. 

By carefully considering your costs, value proposition, and market dynamics, you can set a price that reflects your value and resonates with your target audience.

MadAppGang is here to support and guide you in this endeavour. With a decade of experience in the IT industry, we understand the challenges and opportunities that startups face. Whether it's creating your pricing strategy or developing cutting-edge solutions, we are committed to your growth and success. 

We've compiled a list of 10 innovative startup ideas from Reddit in 2024 to help you stay on top of the hottest trends.

Here's to your journey of creating impactful products, pricing right, and achieving remarkable success. Best of luck!